Organizations from Hell: When Leadership Fails

Bad organizations very often have problems at the top. The leaders either are the cause of the problem, or they don't work to solve them (or are unaware of just how toxic their organizations have become). Here are some examples when leadership helps create an "organization from hell."

"The Clueless Leader" The leaders in these organizations are simply out of touch with how bad things are. Like Michael Scott from the TV show "The Office," these leaders simply don't realize how bad thing are or simply don't care. I recall discussing with the president of one organization the possibility of an employee survey to try to get a handle on how disgruntled employees had become. "Why would we want to do that?" was the clueless response.

ANTIDOTE: It is important for leaders to regularly "take the temperature" of their organization, encouraging the upward flow of communication about operations and what employees are thinking and feeling.

"Letting the Rats Run the Ship" All too often, leaders delegate responsibility to either incompetent managers or allow certain "poisonous" individuals to have too much power in the organization, leading to rampant dysfunction. In one organization, the CEO, who was often absent, delegated all operations to a team of department heads - half of which were completely incompetent. With no one in charge, little was accomplished because the departments needed to work together to get things done. The finger pointing and passing the buck led to a completely dysfunctional organization.

In another organization, two very pernicious and self-serving managers were able to stifle any sort of program or initiative that did not directly benefit them. A succession of leaders failed to deal with this diabolical duo, and the organization became stagnant (as well as a horrible place to work, particularly for the entrepreneurial and dedicated employees who were stymied at every turn).

ANTIDOTE: Leadership is about effective delegation, empowering employees, but also monitoring their performance and progress. Leaders need to be careful about those they select for positions of power, and work to remove those who are not doing their jobs.

"Incompetence at the Top" The Peter Principle is the notion that in traditional organizations people move up the chain of command until they reach their level of incompetence. Although research has not established the existence of the Peter Principle, in some organizations this does indeed happen. I recall one Chief Operating Officer who was convinced not only that he was always right, but that he had the support of the majority of his followers. After making one particularly bad and very unpopular decision, he stated, "I think I've built up enough "capital" around here that people will forgive me." Unfortunately, his "bank account" was already bankrupt from previous blunders.

ANTIDOTE: If leaders select for both competence and high potential, and if leaders inspire, challenge, and develop managers, there won't be a Peter Principle in the organization.

"When Bureaucracies Trump Leadership" When even good leaders become detached from what is going on in their companies, the creep of the bureaucracy can come into play and cause an organization to become quickly dysfunctional. Management guru, Peter Drucker, once said that it only takes about twenty minutes for a bureaucracy to take hold (Drucker said, "bureaucracies are about rules, not results."). As a result, organizations become stagnant as members are unwilling to innovate or be creative. Everyone follows "the rules," even when those rules make no business sense.

ANTIDOTE: A good leader needs to encourage and stimulate creativity, innovation - empowering and challenging employees rather than stifling their initiative.